topic Dependent and stimulus in Deductions & credits

Dependent and stimulus

hairgal2001 — Wed, 24 Feb 2021 14:35:14 GMT

I claimed my son on my 2020 taxes but did not in 2019. He received both stimulus checks. Will he have to pay them back or should we just file amendments and I will take a loss?

Re: Dependent and stimulus

CatinaT1 — Wed, 24 Feb 2021 14:50:01 GMT

The payments were an advance credit for 2020. 2019 information was used in sending out the payments since 2020 tax returns had not been filed at the point the stimulus payments were sent out. They are being reconciled when you do your 2020 return. In some cases, people may have been given a stimulus payment based on their 2019 dependents that did not qualify based on their 2020 dependents, and vice versa. There is no provision for repayment of stimulus payments received.

Re: Dependent and stimulus

Opus 17 — Wed, 24 Feb 2021 14:57:20 GMT

We don't know how the IRS will handle audits and enforcement of the stimulus payments. If your son could have been claimed as a dependent in 2019, he should have answered "yes" to "Can someone else claim you as a dependent?" even if he didn't want to be claimed and the person who could have claimed him agreed not to. That would have disqualified him. So, he apparently answered "no" on his 2019 tax return to get the payments. If he legitimately could not have been claimed in 2019, and his financial and living arrangements changed in 2020 so he could be claimed, then you did nothing wrong. The IRS made advance payments based on 2019 information and repayment is not required if the 2020 information is different.

However, if he could have been claimed in 2019, and did not answer "yes", that could potentially be viewed as a problem. But there is no way to amend to repay the credit in that case, and we have no idea how the IRS will enforce the issue with so many payments having been made.